THE TAKEAWAY: USD Federal Open Market Committee releases quarterly economic forecasts > Growth, Inflation downgraded, while Unemployment Rate upgraded > $85B/month pace of QE3 unchanged
The US economy will grow at a rate of +2.3% to +2.8% in 2013, according to the Federal Reserve’s latest round of economic projections released today, down from the +2.3% to +3.0% range first set forth in December 2012. Amid the softer growth forecast, policymakers have also downgraded the inflation forecast for the world’s largest economy, with the Core PCE forecast for 2013 falling to +1.5% y/y to +1.6% y/y, from +1.6% y/y to +1.9% y/y.
Aside from the revised economic projections, which paint a slightly dimmer picture for the US economy thanks to fiscal policy that has “become more restrictive,” the Federal Open Market Committee did offer a better near-term assessment of economic conditions, that resulted in a more upbeat policy statement. Policymakers noted “a return to moderate economic growth following a pause late last year,” with “labor market conditions [showing] signs of improvement in recent months.”
Nevertheless, the key interest rate was kept on hold at 0.25%, and the pace of QE3 was kept on hold at $85B/month in agency MBS and US Treasury purchases.
Presented below, without commentary, are the key figures from the Fed’s revised 2013 forecasts.
--- Written by Christopher Vecchio, Currency Analyst
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